The provincial budget was tabled last week, and the real estate market is about to undergo a couple of big changes.

 

Updates to the Property Transfer Tax (PTT) Framework
In the 2024 provincial budget, the BC Government is making significant changes to

PTT  Framework.

Here are 2 most important changes you need to know if you are a first time buyer or if you are planning to buy a newly constructed home.

1, Increase the Fair Market Value Threshold for the First Time Home Buyer (FTHB) Exemption:

Currently, the Firts time home buyer (FTHB) full exemption applies to properties with a fair market value (FMV) of less than $500,000, with a partial exemption for properties with a FMV of $500,000 to $525,000.

As of April 1st, 2024, the FTHB exemption will apply to properties differently. For properties with a Fair market Vallue (FMV) of less than $835,000, PTT is not payable on the first $500,000, but payable on the difference between the FMV and $500,000. For example, if the FMV of the property is $700,000, the PTT paid would be 2% of $200,000 ($700,000 less $500,000). Not paying PTT on the first $500,000 saves the purchaser a total of $8,000.

If the property’s FMV is between $835,000 and $860,000, a partial exemption applies, but the BC government has not yet confirmed the details.

If the FMV of the property is over $860,000, then there is no FTHB PTT exemption.

2, Increase the FMV Threshold for the Newly Built Home ExemptionEffective April 1, 2024, the FMV threshold to claim the Newly Built Home Exemption will be increased from $750,000 to $1,100,000. A partial exemption is also available for properties with an FMV just above the threshold. The phase-out range is $50,000 above the threshold, so properties with an FMV of greater than $1,150,000 will not be able to claim the Newly Built Home Exemption.

Tibor Bogdan